Gift card laws ranked by state

Longtime listeners know that Clark thinks gift cards are lousy because they offer a product that's vastly inferior to cash. Yet some states have state laws that make gift cards, well, not quite as bad as they could be!

ScripSmart.com has compiled a resource on gift card laws by state. Only six states get a grade of A in the survey -- California, Connecticut, Massachusetts, Minnesota, Rhode Island and Washington State. The state legislatures in these states have passed specific protections to help you as a gift card buyer.

The new federal law on gift cards that went into effect in late summer had many provisions waived for this Christmas. Unfortunately, that means many federal protections lag and won't be available until next Christmas season.

In general, Clark doesn't like gift cards. During the recession, there have been extra dangers with gift cards because retailers, spas and restaurants that issued them could turn around and go bust. Your money is almost always toast in that case. You're taking real money that can be used anywhere and converting it into fake money that's only good at a single place.

There's only one exception to his "no gift cards" rule, and that's cards where you get goods or services in excess of what you pay. Then it's worth the risk that the issuing merchant may go bust.

If you don't know what to give somebody this holiday season, the consumer champ recommends buying a cute card and personalizing it with your own mock gift card by wrapping it in a piece of paper. Use your mock gift card to explain that yours is a special gift card with no expiration date that can be spent anywhere.

Just don't give $100 bills because of the risk of counterfeiting!